Best Checking/ System for Cash Management/ Sweeping?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
PeterParker
Posts: 119
Joined: Sun Mar 17, 2013 2:19 pm

Best Checking/ System for Cash Management/ Sweeping?

Post by PeterParker » Wed Oct 10, 2018 11:16 am

Hello there --

I'm not super well versed in liquid cash management options.
Right now for checking I have Chase bank (cash deposits and convenience, bill pay/ checks) and Charles Schwab (no forex/ free ATMs everywhere).

The challenge:

I want to maximize returns & liquidity at the same time.
It seems with Schwab, I'm always running out of money there (I used it solely for cash withdrawls). And transfers from Chase to Schwab take 4-5 business days (a big problem in practice).

From some reading, it looks like some option is to put money in a money market (MM) fund at Schwab and if my checking balance reaches $0, it will automatically pull from the MM fund.

Looks like the only problems are --- 1. It sounds like maybe they don't automatically liquidate the MM fund, but apply an 12% APR loan debt on your account and you have to manually liquidate the MM funds to pay it off. Kind of kills the convenience aspect, no?

2. There are no automatic sweep functions that allocate money between the MM/ cash positions in Schwab, like Fidelity CMA possibly has.

Anyone find a system that works? Either with Schwab or elsewhere?

arf30
Posts: 527
Joined: Sat Dec 28, 2013 11:55 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by arf30 » Wed Oct 10, 2018 12:11 pm

Fidelity CMA - automatically liquidates MM funds to pay for things, free ATM worldwide
Fidelity Brokerage - can be used as a checking account, uses a money market fund as core position
VanguardAdvantage - checking that uses a money market fund as core position, requires 500k at Vanguard
Chase - can buy Vanguard MM funds in the free investment account, but transfers to checking would be manual
Schwab - checking can use brokerage as overdraft, but only as a margin loan, not by selling funds

kaneohe
Posts: 5753
Joined: Mon Sep 22, 2008 12:38 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by kaneohe » Wed Oct 10, 2018 12:25 pm

PeterParker wrote:
Wed Oct 10, 2018 11:16 am
................................(I used it solely for cash withdrawls). And transfers from Chase to Schwab take 4-5 business days (a big problem in practice).

.....................................................

2. There are no automatic sweep functions that allocate money between the MM/ cash positions in Schwab, like Fidelity CMA possibly has.

........................................
1)If you control from Schwab (using Moneylink), pulling from Chase to Schwab will take 1 biz day if you request early enough.
2)Schwab changed their sweep money fund from a decent yielding fund to a pitifully low yielding bank fund earlier this year. Call them and ask them why with the Fidelity threat lightly veiled. Perhaps if enough of us question their change, we can move this mountain.

ShadowRegent
Posts: 80
Joined: Sun Jan 04, 2015 12:52 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by ShadowRegent » Wed Oct 10, 2018 12:27 pm

Another option is Merrill Edge. The current yield on the BIF Money Fund is 1.57%, but you need to call to request to make it your "Primary Money Fund". It will automatically sweep funds into this fund and automatically redeem for debits. Vanguard Advantage has a higher yield, but requires Flagship status for it to be free.

grp2c
Posts: 94
Joined: Sat Mar 08, 2014 5:51 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by grp2c » Wed Oct 10, 2018 12:30 pm

I just transferred my checking to Fidelity. With a brokerage account, you can get an atm card, checkbook, and online bill bay. Core position is either SPAXX or FZFXX. At premium level in brokerage account all atm fees are reimbursed. Or there's a cash management account (CMA) which has an FDIC insured core. In either account you can buy other money market funds which add to "cash available to withdraw" and will auto liquidate to cover debits.

Another option is keep a high interest saving account at another bank and deposit income there. Then in a CMA setup a monthly automatic investment into a money market fund to cover monthly expenses which pulls funds from the other linked savings account.

CMA but not brokerage account also has a cash manager feature which you can set a minimum balance and if your balance drops below it, funds will automatically be transferred from another fidelity account instantly to cover or an ACH pull will initiated to pull funds from another bank. ACH pull will take a few days to replenish the balance.

Topic Author
PeterParker
Posts: 119
Joined: Sun Mar 17, 2013 2:19 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by PeterParker » Fri Oct 12, 2018 3:34 pm

Just to clarify ---

I travel outside the US a lot. I like Schwab's ATM reimbursement and no FOREX fees (even Fidelity charges 1%, enough to dissuade me).
They have even reimbursed nutty $20 ATM fees in many casinos and ahem ... strip clubs. (I might frequent once a year & don't try to abuse really).


Sounds like the 'automation' of fresh cash within the Schwab account (for immediate withdrawl, fee free) might be a pipe dream.

The annoying thing is -- currently, right now, Friday afternoon --- if I wanted to transfer in money from Chase (my main checking account, it just cuts checks better & has better options for everything except cash withdrawls) --- it would only happen on Monday --- and then it would take FOUR ADDITIONAL BUSINESS DAYS to become dispensable as cash (so it would be ready Thursday/ Friday) -- a calendar week for a transfer is just too much of a [chore --admin LadyGeek], and has proven a hassle in practice.


Sounds like what I need to do is just automate a deposit (even a small one) into the Schwab Brokerage --- regular equities/ investments. Whatever is fastest to sell off (so no mutual funds, maybe ETFs).

I'm wondering what investment would have the most liquidity, given I don't care about timing the markets. Almost seemed like I could liquidate Vanguard mutual funds pretty quickly into Chase, but I never tested it for maximum speed (always seemed like 1-2 business days, which is quick enough).

stlutz
Posts: 5223
Joined: Fri Jan 02, 2009 1:08 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by stlutz » Fri Oct 12, 2018 3:59 pm

even Fidelity charges 1%, enough to dissuade me
To clarify, this is for debit card purchases, not ATM withdrawals.

I've been a big fan of Schwab Bank in the past, but have been moving over to the Fidelity solution because they make the whole money market fund thing much easier than Schwab.

Topic Author
PeterParker
Posts: 119
Joined: Sun Mar 17, 2013 2:19 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by PeterParker » Mon Oct 15, 2018 4:56 pm

Are you sure? I'm reading under their 'ATM reimbursement' that they charge a 1% forex at Fidelity.

That's not much but eh. I already have Schwab so eh.

arf30
Posts: 527
Joined: Sat Dec 28, 2013 11:55 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by arf30 » Mon Oct 15, 2018 5:17 pm

The wording on Fidelity's site is vague/incorrect and even their own reps are confused but the 1% foreign transaction fee is only on the debit side.

mervinj7
Posts: 968
Joined: Thu Mar 27, 2014 3:10 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by mervinj7 » Mon Oct 15, 2018 6:27 pm

PeterParker wrote:
Mon Oct 15, 2018 4:56 pm
Are you sure? I'm reading under their 'ATM reimbursement' that they charge a 1% forex at Fidelity.

That's not much but eh. I already have Schwab so eh.
It's very confusing, for sure. When I was in Europe and Asia, we used our Fidelity ATM card to withdraw cash with no Foreign Transactions Fees added and all ATM fees refunded. As I understand it, there is a 1% fee if you use your debit to make purchases. However, we used our Chase Visa card for any purchases.

Chip
Posts: 2547
Joined: Wed Feb 21, 2007 4:57 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by Chip » Tue Oct 16, 2018 4:59 am

mervinj7 wrote:
Mon Oct 15, 2018 6:27 pm
It's very confusing, for sure. When I was in Europe and Asia, we used our Fidelity ATM card to withdraw cash with no Foreign Transactions Fees added and all ATM fees refunded. As I understand it, there is a 1% fee if you use your debit to make purchases. However, we used our Chase Visa card for any purchases.
Agreed, the wording on the website is very confusing.

I just returned from a Europe trip. Exchange rates I received on ATM withdrawals via the Fidelity card were identical to the rates I received on purchases I made the same day with a Capital One Visa (no transaction fee, of course). Yes, I have a spreadsheet. :D

I also had a couple of ATM fees refunded. But I think that might only be available for those with Private Client Group status. Not sure, though, and too lazy to look.

mervinj7
Posts: 968
Joined: Thu Mar 27, 2014 3:10 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by mervinj7 » Tue Oct 16, 2018 10:42 am

Chip wrote:
Tue Oct 16, 2018 4:59 am
mervinj7 wrote:
Mon Oct 15, 2018 6:27 pm
It's very confusing, for sure. When I was in Europe and Asia, we used our Fidelity ATM card to withdraw cash with no Foreign Transactions Fees added and all ATM fees refunded. As I understand it, there is a 1% fee if you use your debit to make purchases. However, we used our Chase Visa card for any purchases.
Agreed, the wording on the website is very confusing.

I just returned from a Europe trip. Exchange rates I received on ATM withdrawals via the Fidelity card were identical to the rates I received on purchases I made the same day with a Capital One Visa (no transaction fee, of course). Yes, I have a spreadsheet. :D

I also had a couple of ATM fees refunded. But I think that might only be available for those with Private Client Group status. Not sure, though, and too lazy to look.
Great minds think alike! We only figured out that there was no transaction fee when we compared a 100 Euro Fidelity ATM withdrawal to a 100 Euro Chase Sapphire Reserve purchase on the same day. ATM fees are refunded for all with a Cash Management Account, not just those with Private Client Group status. The fine print wording is awful and they are probably losing Cash business because of it. Or maybe that's the point...

johnsmithsf
Posts: 37
Joined: Sat Jan 14, 2017 2:51 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by johnsmithsf » Mon Jan 28, 2019 8:31 am

arf30 wrote:
Wed Oct 10, 2018 12:11 pm
Fidelity CMA - automatically liquidates MM funds to pay for things, free ATM worldwide
Fidelity Brokerage - can be used as a checking account, uses a money market fund as core position
If I simply use Fidelity Brokerage as a checking account, will it automatically liquidate MM funds (like SPAXX) to pay for things? It will keep things very simple.

arf30
Posts: 527
Joined: Sat Dec 28, 2013 11:55 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by arf30 » Mon Jan 28, 2019 8:32 am

johnsmithsf wrote:
Mon Jan 28, 2019 8:31 am
If I simply use Fidelity Brokerage as a checking account, will it automatically liquidate MM funds (like SPAXX) to pay for things? It will keep things very simple.
Yes

johnsmithsf
Posts: 37
Joined: Sat Jan 14, 2017 2:51 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by johnsmithsf » Mon Jan 28, 2019 8:45 am

arf30 wrote:
Mon Jan 28, 2019 8:32 am
johnsmithsf wrote:
Mon Jan 28, 2019 8:31 am
If I simply use Fidelity Brokerage as a checking account, will it automatically liquidate MM funds (like SPAXX) to pay for things? It will keep things very simple.
Yes
Thank you very much. Currently all of my cash is earning very little in a brick and mortar bank, and I also want to consolidate things in fewer places as I already have Fidelity retirement accounts.

I will use Fidelity Brokerage as a checking account for direct deposit and credit-card/utilities/house auto-payments and keep only a small amount in the Fidelity CMA (with no overdraft protection) for occasional Checks and ATM Withdrawals.

I don't want to use the "Cash Management Account" as "Checking Account" because in it you can not set up a money market as core position and you have to buy MM manually. And more worryingly, Cash Manager overdraft protection funded by using available funds in Fidelity Brokerage can get all the funds drained if someone commits a ATM/Check Fraud/debit card fraud on it.

Does this plan look OK to you? Or is there a better plan.

arf30
Posts: 527
Joined: Sat Dec 28, 2013 11:55 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by arf30 » Mon Jan 28, 2019 8:48 am

johnsmithsf wrote:
Mon Jan 28, 2019 8:45 am
Does this plan look OK to you? Or is there a better plan.
That should work fine, it's a common approach.

btenny
Posts: 5103
Joined: Sun Oct 07, 2007 6:47 pm

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by btenny » Mon Jan 28, 2019 12:41 pm

I like Wells Direct low cost brokerage and Wells Fargo checking all linked together. I keep some cash in my checking and write checks as needed. If I want more cash in checking I just log on and transfer $$ from my brokerage account to checking. It takes about 3 minutes to do the on line work and a hour or so to complete the transaction. I can transfer money to pay my credit card or to move money from checking to the brokerage.

In the brokerage account I can buy or sell BIL or VMMXX for handling cash or just let it set in the cash sweep account. I mostly own and buy Vanguard Admiral funds and ETFs for this account. I am a long term customer so I get free trades.

I also get free foreign ATM transactions and currency exchanges but I have to call after the fact and get them removed. But it is painless.

Good Luck.

engineerbme
Posts: 45
Joined: Tue Jun 04, 2019 10:12 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by engineerbme » Mon Aug 12, 2019 9:20 am

Chip wrote:
Tue Oct 16, 2018 4:59 am
mervinj7 wrote:
Mon Oct 15, 2018 6:27 pm
It's very confusing, for sure. When I was in Europe and Asia, we used our Fidelity ATM card to withdraw cash with no Foreign Transactions Fees added and all ATM fees refunded. As I understand it, there is a 1% fee if you use your debit to make purchases. However, we used our Chase Visa card for any purchases.
Agreed, the wording on the website is very confusing.

I just returned from a Europe trip. Exchange rates I received on ATM withdrawals via the Fidelity card were identical to the rates I received on purchases I made the same day with a Capital One Visa (no transaction fee, of course). Yes, I have a spreadsheet. :D

I also had a couple of ATM fees refunded. But I think that might only be available for those with Private Client Group status. Not sure, though, and too lazy to look.
while aboard, have you or anyone else on this forum, successfully used the CMA abroad with $0 in the account and overdraft on? im traveling in a few months and was wondering if I need to keep some money in the CMA just to be safe and not get declined at ATMs abroad, TIA

Chip
Posts: 2547
Joined: Wed Feb 21, 2007 4:57 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by Chip » Mon Aug 12, 2019 10:52 am

engineerbme wrote:
Mon Aug 12, 2019 9:20 am
while aboard, have you or anyone else on this forum, successfully used the CMA abroad with $0 in the account and overdraft on? im traveling in a few months and was wondering if I need to keep some money in the CMA just to be safe and not get declined at ATMs abroad, TIA
I haven't. I only have the regular brokerage account.

It seems that a few people here have had trouble with ATM withdrawals from the zero balance CMA with overdraft. So if it were me I'd put money in the CMA, as it seems like a small price to pay to avoid that particular worry.

But I always want to make sure I have access to cash. So I also move a few thousand into my checking account, with its separate ATM card, before such a trip, just in case the Fidelity debit card gets stolen, quits working, etc.

engineerbme
Posts: 45
Joined: Tue Jun 04, 2019 10:12 am

Re: Best Checking/ System for Cash Management/ Sweeping?

Post by engineerbme » Tue Aug 13, 2019 10:13 am

Chip wrote:
Mon Aug 12, 2019 10:52 am
engineerbme wrote:
Mon Aug 12, 2019 9:20 am
while aboard, have you or anyone else on this forum, successfully used the CMA abroad with $0 in the account and overdraft on? im traveling in a few months and was wondering if I need to keep some money in the CMA just to be safe and not get declined at ATMs abroad, TIA
I haven't. I only have the regular brokerage account.

It seems that a few people here have had trouble with ATM withdrawals from the zero balance CMA with overdraft. So if it were me I'd put money in the CMA, as it seems like a small price to pay to avoid that particular worry.

But I always want to make sure I have access to cash. So I also move a few thousand into my checking account, with its separate ATM card, before such a trip, just in case the Fidelity debit card gets stolen, quits working, etc.
thanks that seems like the safest bet to play, appreciate your response

Post Reply